New figures released by the Society of Motor Manufacturers and Traders (SMMT) show that the UK’s car manufacturing industry has witnessed an upturn in January. 

According to data from last month, manufacturing increased by 21% to 82,997 units. 

This marks the sector’s strongest start to the year since 2021 and continues a five-month growth trend, bolstered by rising global demand and easing supply chain issues, such as semiconductor shortages. 

Exports remain the cornerstone of the UK’s car production, accounting for 75.8% of the total output, with 62,938 vehicles shipped overseas – an increase of 11.6%. 

The growth in the domestic market, however, was even more pronounced, soaring by 64.5% with an additional 7,863 units produced for UK buyers. 

The EU remains the primary export destination for British-built cars, absorbing over half (53.2%) of the exports.  

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The US (15.0%), China (10.5%), Japan (2.8%) and Australia (2.3%) also feature prominently, with exports to the US and China registering a surge of 81.1% and 33.2%, respectively. 

The production of electric and hybrid vehicles in the UK, including battery electric (BEV), plug-in hybrid (PHEV), and hybrid (HEV) models, also rose by 4.5% to 29,590 units, representing 35.7% of the total car production.  

The majority of these eco-friendly vehicles are going to be sold in international markets, highlighting the global demand for British-engineered electrified vehicles. 

SMMT chief executive Mike Hawes said: “A positive start to the year for UK car production bodes well for the industry and the many thousands of livelihoods on which it depends. There can be no room for complacency, however, given economic headwinds and geopolitical tensions.  

“There must be a relentless commitment to competitiveness, building on the significant recent investments into the sector. The forthcoming Budget is a chance for the government to do just that by introducing measures to boost UK automotive manufacturing, focused on energy, investment competitiveness and market demand.” 

Earlier this month, the SMMT reported a 13.5% increase in heavy goods vehicle (HGV) registrations in the UK for 2023.  

This marks the second year of consecutive growth and the highest annual total since 2019, signalling strong business investment in fleet operations.